Starbucks Profit Edges Up; Will Shut Stores

Starbucks posted 2 percent higher profit, barely beating estimates, as the coffee seller scrambles to revivify its once-rapid growth and grapples with weaker U.S. consumer spending and rising food prices.

Bernd Kammerer / AP

The company's shares lost as much as 2.45 percent in after-hours trade; the stock had closed down 3.76 percent, or 75 cents, at $19.22 on the Nasdaq.

Starbucks had fiscal first-quarter net earnings of $208.1 million, or 28 cents per share, compared with $205.0 million, or 26 cents per share, in the year-ago quarter. The results topped the analyst consensus of 27 cents per share.

The beverage-service boutique chain also projected "low double-digit" earnings-per-share growth in 2008.

Earlier this month, company founder, President and Chairman Howard Schultz returned as chief executive, and vowed to boost global expansion and shut underperforming store locations. As many as 100 U.S. locations are slated to be closed down.

"Over the coming months, our management team will focus on building a long-term model to realize our transformation agenda, and drive long-term shareholder value,” said Schultz in a company statement.

“We will do that by being laser-focused on delivering what our customers want and expect, and providing our partners with the tools to help them exceed our customers’ expectations.

"Our actions will dramatically change the business, which will enable us to offer a renewed 'Starbucks Experience' to our customers, while systematically building the foundation for strong, sustainable growth in fiscal 2009 and beyond.”

© 2008 CNBC.com